In this article, Harvey attempts to provide an unbiased view of the U.S. tax policy issues surrounding U.S. MNCs’ efforts to shift taxable income out of the United States. He is very pessimistic about the IRS’s ability to prevent most income shiting, and as a result, is concerned U.S. MNCs may have a competitive tax advantage over U.S. domestic companies. However, he is also concerned that certain proposed solutions to the income shifting issue may cause U.S. MNCs to be at a competitive disadvantage with foreign MNCs.

Harvey proposes two potential solutions that could accomplish the dual tax policy goals of creating a level playing field between U.S. MNCs and U.S. domestic companies, and U.S. MNCs and foreign MNCs. If neither proposal is possible, U.S. tax policy makers will need to make a choice. Specifically, do they favor U.S. MNCs at the expense of U.S. domestic companies? Or, do they put U.S. MNCs and U.S. domestic companies on a relatively level playing field, but then potentially put U.S. MNCs at a competitive disadvantage with foreign MNCs?

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